TDS on retention bonus refund

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This discussion addresses how to claim a refund for Tax Deducted at Source (TDS) paid on a retention bonus that was subsequently repaid to the company. The advice suggests reducing the income from the previous employer by the amount repaid, even if not explicitly shown in the Form 16. Supporting documentation, such as the company's full and final settlement letter, can be used to justify the deduction if queried by the tax department.

Uma Iyer

Uma Iyer (Querist)
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25 July 2023 hi , my query is for the TDS paid on retention bonus.
Retention bonus was received in FY 21 post deduction of Tax. The next year the employee resigned and had to pay the full amount back to the company.
The bonus paid back, is shown in the full and final letter given by the company. however; how to get the refund on the tax which is already paid in the previous year. Please advise, how to claim the tax on amount paid back. Should it be reduced in the income from Previous employer or shown as any other deduction?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 July 2023 Reduce the income from previous employer.

Uma Iyer

Uma Iyer (Querist)
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25 July 2023 but the issue is in the Form 16 they have not showed the amount paid back to the co; however there is statement from co in Full and final settlement showing the gross amt paid back as retention bonus.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 July 2023 Any how you can reduce if it's within 10% any query from IT department it can be replied with document.

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